Read This Before Doinf Taxes

General Discussion for SMART Scholarship Recipients

Read This Before Doinf Taxes

Postby Chris » Mon Feb 04, 2019 5:47 pm

https://ttlc.intuit.com/questions/37849 ... o-i-put-it

This is the proper method (if using turbotax) for avoiding the self employment tax, after SMART decided to put this crap on a 1099 (which they shouldn't have, it a just them being lazy).

And dont worry, there should be no grey area here. SMART very clearly states that the stipend is not in exchange for any type of service and that we are not considered self employed. This is legit.
Chris
 

Re: Read This Before Doinf Taxes

Postby PhdSMART » Thu Feb 07, 2019 2:25 pm

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Re: Read This Before Doinf Taxes

Postby chowder138 » Fri Mar 15, 2019 9:54 pm

So to confirm, this means the stipend is **NOT** taxable? And if the stipend was my only income, then I shouldn't owe any taxes? It's so hard to keep this stuff straight.
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Re: Read This Before Doinf Taxes

Postby Guess Again » Sat Mar 16, 2019 3:53 pm

chowder138 wrote:So to confirm, this means the stipend is **NOT** taxable? And if the stipend was my only income, then I shouldn't owe any taxes? It's so hard to keep this stuff straight.


Wrong! Stipend is taxable as a taxable scholarship (but not self-employment income.) Could be subject to the "Kiddie Tax". Lots of advice on this forum but not all of it is accurate. Refer back to IRS documents and get professional advice if you don't understand the regulations.
Guess Again
 

Re: Read This Before Doinf Taxes

Postby chowder138 » Sun Mar 17, 2019 10:26 pm

Guess Again wrote:
chowder138 wrote:So to confirm, this means the stipend is **NOT** taxable? And if the stipend was my only income, then I shouldn't owe any taxes? It's so hard to keep this stuff straight.


Wrong! Stipend is taxable as a taxable scholarship (but not self-employment income.) Could be subject to the "Kiddie Tax". Lots of advice on this forum but not all of it is accurate. Refer back to IRS documents and get professional advice if you don't understand the regulations.


I'm confused then, because the first page linked in this thread says to make an adjustment the total amount paid by SMART, but negative. Which makes it untaxed.

I'm thinking I'm going to go talk to a CPA and get professional advice on how exactly to file this.
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Re: Read This Before Doinf Taxes

Postby SmartParent » Fri Mar 29, 2019 3:56 pm

There are 3 steps.

1) Enter the 1099 income so the 1099 doesn't fail the IRS matching program, but since this is in box 3 it is reported as miscellaneous income and in the wrong place

2) Correct the "bad" entry by reentering as a negative miscellaneous income to remove the income from the total.

3) Enter the income as a taxable scholarship so it is treated correctly. (Scroll down to the section on REPORT STIPEND INCOME CORRECTLY" This is the important step that may be missed on a quick reading.

At least this year it is in box 3 so you don't have to create a fake business to do the same thing.
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